Indonesia Startup Adoption To Blockchain

Digital economy in Indonesia had shown great potential, as shown by the rise of Go-Jek and Grab, ride-sharing companies whose success has been propelled by the ubiquitous use of smartphones. In mid of 2016, Go-Jek raised $550 million in new capital, giving it a value of $1. 3 billion, an incredible result given it had launched its first mobile phone application only a year and a half earlier. The volume of Indonesia’s digital economy will reach about USD $130 billion by 2020, which will make the country among Southeast Asia's leading nations in terms of digital development. Technological advancements on Indonesia turns out to have a large impact on various aspects. One of them is the economic aspect that now leads to a digital economy.

Emerging technological innovations ease access to information, and solving problems easier and faster than a few decades ago. The rise of technology-based startup companies or startups is also one of the results of the technological advances influence. Not only in developed countries, rapid startup growth also occurring in Indonesia. Even Indonesia is known as one of the countries with the biggest digital economic potential in the world. In fact, based on StartupRanking (2018), Indonesia ranks sixth in the list of countries that have the most number of technology-based startup companies under the United States, India, United Kingdom, Canada and Germany. It also defines startup as an organization with high innovation competence and strong technological base, which has the faculty of an accelerated growth and maintains independence through time. Bukalapak was ranked as the first startup in Indonesia followed by Blibli and Traveloka. While Go-Jek, which is the technology startup company that holds the first Unicorn title in Indonesia, is ranked 15th.

Indonesia has shown a significant progress in the overall digital economy and business leaders should embrace technologies so that they don’t miss out clear opportunities with the rise of new digital transformation economy. According to IDC analysis, there are 10 top technology predictions for 2018. One of the prediction is Blockchain and digital trust. By 2021, at least 10% of the Indonesian enterprises will use blockchain services as a foundation for digital trust at scale; by 2020, 20% of banks and 20% of supply-chain organizations will use blockchain networks in production. Blockchain technology is briefly explained a public, distributed and trusted ledger, which is available for everyone. It is also tamper proof, which means that when a piece of information is put in to the blockchain, it cannot be tampered with unnoticed. Technically any kind of intangible information of value can be put in to the ledger. The blockchain technology does not require any trust between its users, which allows making transactions without a third party. Interest in blockchain in Indonesia evolved from initial excitement around cryptocurrencies.

Though the future of digital currencies remains opaque in many ways, blockchain is now seen as a potential major disruptor in many industries, not just in financial services. According to Pandu Sastrowardoyo, blockchain interest in Indonesia has been evolving in the past 18 months which started from cryptocurrency sector and morphing into interest in actual tech applications. The hype from blockchain is indicated from the blockchain community emergence, such as Asosiasi Blockchain Indonesia and Indonesia Blockchain Hub. This shows that Indonesia is already shown its awareness towards the growth of blockchain in Indonesia. According to Asosiasi Blockchain Indonesia, the number of blockchain startup in Indonesia is not yet identified. The existing examples of blockchain startup on Indonesia are mostly comes from cryptocurrency or financial technology (fintech) area, for example Indodax, Tokenomy, Luno, TokoCrypto, Abra, Triv and Coinbase. Non fintech blockchain startup that has been established is very limited. One of the examples of non fintech blockchain startup is HARA, local startup that is engaged in blockchain-based agricultural data exchange. There are four potential industries in Indonesia that would be disrupted by blockchain, such as government, supply chain logistics, consumer transactions, and data security. However, these industries are not yet utilizing blockchain technology. There does not exist an explanation why the remaining non blockchain startup not using blockchain in Indonesia.

Indonesia startup has shown significant growth and potentials. In 2017, Chinese investors became heavily involved in Indonesia’s startup environment, accounting for 95% of its investment value. Now blockchain startups are increasingly prevalent and they could further bolster Indonesia's position as a rising regional tech hub. But the blockchain craze is still in its early stages, and although opportunities are ripe, significant challenges remain. There are 1, 914 technology based startup in Indonesia. However, the number of startups that utilize blockchain on their business model is still limited. The question remains is why Indonesia startup don’t utilize blockchain technology on their business. There does not exist a comprehensive overview of how Indonesia startup adopting blockchain technology on their business.